Oz minister slams Rep 'crazies'

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Australian Treasurer Wayne Swan on Friday attacked Tea Party supporters in the US Republican Party, saying "cranks and crazies" were a threat to the world's largest economy.

The Labor politician, who is also Australia's deputy prime minister, said markets were nervously watching hardline elements in Mitt Romney's Republican Party for signs they might block reasonable attempts to support growth.

"Let's be blunt and acknowledge that the biggest threat to the world's biggest economy are the cranks and crazies that have taken over a part of the Republican Party," he told a business breakfast in Sydney.

Swan noted the ideological deadlock between Republicans and Democrats in Washington a year ago, which led ratings firm Standard & Poor's to strip the United States of its top-level AAA rating after 70 years.

"Despite (President Barack) Obama's goodwill and strong efforts, the national interest there was held hostage by the rise of the extreme Tea Party wing of the Republican Party," he said.

"And there can be few things more alarming in public policy than a political movement which was genuinely prepared to see the government of the United States default on its obligations in order to score a political point."

Swan said investors were keenly watching the tight electoral contest between Obama and Republican contender Romney given the "fiscal cliff" looming early in 2013, which he said was threatening to derail a moderate US recovery.

"With the world watching, it is imperative that the US Congress resolve an agreement to support growth in the short term," he said.

In his speech about the outlook for global growth, Swan also likened the Chinese economy to sprint star Usain Bolt, saying it was so far ahead it could afford to ease off.

Swan said that while China's economy had moderated, this partly reflected a deliberate move towards more sustainable growth, together with the impact of ongoing weakness in Europe on Chinese exports.

He said that China's GDP was now 40 percent larger than in 2008 so its growth rate could be 20 percent lower — eight percent now versus 10 percent back then — for it to make the same contribution to global growth.

"It's like Usain Bolt easing off a bit at the end of the 100 metres because he's 10 metres in front and has already smashed the world record," he said.